Productivity Growth in U.S. Agriculture under Dynamic Adjustment

A dynamic measure of productivity growth adjusted for deviations from the long-run equilibrium is established within an adjustment-cost framework. An empirical application to U.S. agriculture is presented which permits identifying the dynamic linkages between technical change and productivity growth in U.S. agriculture. Total factor productivity as dynamically measured grew at 1.50% per annum. The combined effect of scale, quality-adjusted input growth, and long-run disequilibrium input use contributes only 3.44% of the growth, while technical change dominates the growth of total factor productivity.